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Thursday, April 23, 2009

Obama's Leap To Socialism (and The Republican Trampoline)

President Obama showed his hand this week when The New York Times wrote that he is considering converting the stock the government owns in our country’s banks from preferred stock, which it now holds, to common stock.

This seemingly insignificant change is momentous. It means that the federal government will control all of the major banks and financial institutions in the nation. It means socialism.

Morris goes on to detail the minutia related to both the Bush administration's TARP intervention under which the banks were given taxpayer money and the Democrat's demand that the government take stock in the companies which received it. Morris then decries Obama's recent demand to convert to common stock which would give the government voting rights, labeling such a demand as tantamount to socialism. Originally, Morris writes:

...to avoid the issue of a potential for government control of the banks, everybody agreed that the stock the feds would take back in return for their money would be preferred stock, not common stock. “Preferred” means that these stockholders get the first crack at dividends, but only common stockholders can actually vote on company management or policy. Now, by changing this fundamental element of the TARP plan, Obama will give Washington a voting majority among the common stockholders of these banks and other financial institutions. The almost 500 companies receiving TARP money will be, in effect, run by Washington.

What a shock. Imagine that.

As I explained in more detail in my post Why Republicans Keep Failing, Republicans like Morris are exactly why we are losing our freedom. Note the distinction that Morris makes: "to avoid...government control of the banks, everybody agreed that the stock the feds would take back in return for their money would be preferred stock, not common stock". Wait, back up. So, the Republicans expropriated taxpayer money and gave it to the banks in exchange for preferred stock but they wished to "avoid...government control of the banks." So, evidently, back when we had a capitalist utopia under Bush, the fed's were only asking for "insurance"or "preferred stock" in exchange for subsidizing corporations with loot stolen from taxpayers. But, according to Morris, now that Obama is asking for "common stock", he has really "shown his hand" as a "socialist".

What is the difference in principle between the government receiving common stock as against preferred stock in exchange for subsidies? Yes, there is a minor difference in form, but in principle, both plans concede that the government can and should intervene into the economy. Both parties concede that there is no such thing as property rights since the state can force businesses to do anything and retains the unlimited power to expropriate and redistribute the earnings of the productive. In principle, sanctioning any type of subsidy implies an inversion of the proper relationship between the government and the individual. Instead of the state acting to protect or secure individual rights, corporate welfare necessitates the legalized extortion of the taxpayer.

Once this premise is conceded, is it really a shock when the fed's go on to claim a right to common stock as opposed to preferred? Is it a shock that the fed's want a say in running the corporations they are subsidizing? Will it be a shock when the government decides who sits on the board, who manages the company, and sets salary and bonus caps as they have already done? Is it a shock to anyone that the government has already stopped firms who received TARP money from hiring anyone on an H-1B Visa meaning that highly educated professional immigrants are being fired en masse? If a man concedes that it is alright for another man to have an intimate relationship with his wife, would it be shocking if the other man went from holding hands to kissing to worse? Would you sympathize with the husband if he exclaimed: "Hey, this has gone too far!"?

When this is the kind of unprincipled opposition that the left faces, is it shocking that Republicans keep losing and America marches left?